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White-Collar Labour Markets, 1890-1918: Evidence from the Banking Industry

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This paper uses wage records to examine salaries and career tracks in the English banking industry between 1890 and 1918. The main conclusions are as follows. First, unlike manufacturing and a number of other sectors, which experienced increasing wages prior to the First World War, real wages in banking declined by 20-30 percent between 1890 and 1914. Second, wages increased with tenure over a worker’s entire career. I argue that this was a form of incentive contract designed to reduce turnover and increase effort. Third, there was considerable nominal wage stickiness; in approximately one third of sample man-years an individual received a zero nominal wage increment, but negative increments were virtually unheard of. Fourth, promotions to branch manager typically took 15-20 years and the associated pay increases were used as a positive incentive to encourage workers to supply effort.

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  • Andrew Seltzer, 2004. "White-Collar Labour Markets, 1890-1918: Evidence from the Banking Industry," Royal Holloway, University of London: Discussion Papers in Economics 04/21, Department of Economics, Royal Holloway University of London, revised Aug 2004.
  • Handle: RePEc:hol:holodi:0421
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    5. Bray, Margaret, 1982. "Learning, estimation, and the stability of rational expectations," Journal of Economic Theory, Elsevier, vol. 26(2), pages 318-339, April.
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